February 27, 2024
United States:
Fed Rate Cuts Are Likely to Be Slow — But Not Necessarily Steady
There’s a saying about how the Federal Reserve manages interest rates: They go up the escalator and down the elevator. This time, it will likely be the reverse — frustrating investors betting on a quicker decline.
Rates shot up in 2022 and 2023 at the fastest pace in four decades as the central bank sought to contain surging inflation. Now, with price pressures easing and the economy still strong, Fed officials are prepared to bring rates down at a slower and potentially less regular pace.
Europe:
Germany’s Slow-Motion Property Crash Is a Looming Risk for Banks
As fears about US commercial real estate roiled German banks this month, their message was clear: don’t worry, the vast majority of our property exposure is domestic.
That may not prove the comfort it seems.
Asia:
Japan’s Inflation Tops Forecasts, Supporting BOJ Rate Hike Bets
Japan’s benchmark inflation topped estimates in January, supporting the case for the central bank to scrap its negative interest rate in the coming months.
Bond yields jumped after consumer prices excluding fresh food rose 2% from a year ago, in line with the Bank of Japan’s inflation target. The two-year note yield climbed to the highest level since 2011 after the data from the internal affairs ministry Tuesday exceeded a consensus estimate of 1.9%.
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